NEW YORK, March 17 (Reuters) - A gauge of global equity markets and gold rose on Tuesday after the U.S. Federal Reserve said it would buy short-term corporate debt directly from companies to help relieve credit markets under strain by the impact of coronavirus epidemic.

The renewal of the financial crisis-era Commercial Paper Funding Facility, first used in 2008, will provide a backstop to that market, a key funding source for a range of businesses for which liquidity has dried up recently.

The Fed said the Treasury would provide $10 billion of credit protection to the central bank's commercial paper operation.

Gold snapped a five-session decline on the funding effort and stocks on Wall Street rose as the move eased growing fears of a liquidity crunch due to the coronavirus.

While the funding backstop is important, it still does not assist low-wage workers who get laid off during the closure of restaurants, bars and other entertainment outlets, said David Kelly, chief global strategist at JPMorgan Asset Management.

"The question is, are authorities doing all that they can to soften the blow of the social distancing recession? I don't think we're there yet," Kelly said.

A fiscal spending package is needed as "there's going to be a lot of human misery out there," he added.

Equity markets in Europe rebounded and Wall Street climbed on a series of announcements from the Fed, Treasury Department and White House.

On Wall Street, the Dow Jones Industrial Average rose 432.76 points, or 2.14%, to 20,621.28, the S&P 500 gained 75.37 points, or 3.16%, to 2,461.5 and the Nasdaq Composite added 222.14 points, or 3.22%, to 7,126.73.

The move to add liquidity to credit markets came as major central banks and commercial counterparts joined forces to alleviate broad shortages of dollar financing in global markets.

The Bank of Japan conducted an 84-day dollar funding operation valued at $30.272 billion, its biggest injection of dollar funds since 2008, and South Korea also pledged to act soon.

Before U.S. markets opened, equity and oil prices struggled to shake off coronavirus fears after Wall Street's worst rout since the Black Monday crash of 1987.

The Philippines became the first country to close its markets, while France, Italy, Spain and Belgium curbed stock trading by banning short-selling to shield some of Europe's biggest companies from a sell-off.

The moves will temporarily halt bets on falling shares at scores of companies from the world's largest brewer Anheuser-Busch InBev, to Spanish bank Santander and Air France-KLM.

The dollar surged as companies and investors sought out the most liquid currency, and concerns about the coronavirus' economic impact dented risk appetite.

Three-month euro/dollar cross-currency basis swap spreads rose as high as 120 basis points from less than 90 on Monday, putting the spread as its widest since late 2011 - the height of the euro zone debt crisis.

Some $2.7 trillion in market value was wiped from the S&P 500 on Monday as it suffered its third-largest daily percentage decline on record. Over the past 18 days, the benchmark index has lost $8.3 trillion. World stocks have hemorrhaged over $15 trillion.

Group of Seven finance ministers are expected to hold a call on Tuesday night, though markets want to see fiscal stimulus and signs that the virus will not snowball out of control.

The dollar index rose 1.616%, with the euro down 1.91% to $1.0967.

The Japanese yen weakened 1.46% versus the greenback at 107.45 per dollar.